French consumer confidence unexpectedly plummeted in November, falling three points to 90, Bloomberg reports, citing data released by the national statistics agency Insee.
This marks a return to June levels, when President Emmanuel Macron’s decision to dissolve parliament triggered significant political instability. The decline, which contradicts economists’ predictions of a stable reading at 94 (the October figure was revised down to 93), adds to growing economic headwinds facing the French government.
The gloomy consumer sentiment mirrors the pessimism among businesses as Prime Minister Michel Barnier’s minority government grapples with pushing through a controversial budget. The €60 billion ($63 billion) plan, encompassing substantial tax increases and spending cuts aimed at reducing the country’s deficit, is facing increasing opposition.
The budget’s passage is far from certain, with far-right leader Marine Le Pen escalating threats of a no-confidence vote next month, potentially toppling the government. This political uncertainty is further eroding consumer confidence.
Insee’s survey highlights a significant deterioration in households’ outlook on their future financial situation, living standards, and savings capacity. Concerns about rising unemployment and inflation expectations also increased in November.
